1. Topic 3: A NEW INDUSTRIAL AGE
LATE 19TH CENTURY AMERICA EXPERIENCED AN INDUSTRIAL BOOM

2. The Second Industrial Revolution: Causes, Characteristics and Problems

3. 2nd Industrial Revolution
What was the 2nd Industrial Revolution?
A period in time starting in the late 1800’s where US industries, in major manufacturing goods, were expanding rapidly
Main features were new inventions and industries

4. Causes This enormous growth was due to many factors:
Lots of Natural Resources & Raw Materials
The Railroad
Free Enterprise System
Economic policies:
Laissez-Faire
Patents
Tariffs
Population Growth & Urbanization
New Inventions, like cars

5. 1st and 2nd Industrial Revolution Comparison
Developments of wide array of products
Transformation and synergy of the economy
Extensive impact on society
New energy sources: electricity and oil
1st Industrial Revolution
Development of few products like textiles
limited transformative effect
Limited impact in society
New energy source: steam

6. RAILROADS SPUR OTHER INDUSTRIES
The rapid growth of the railroad industry influenced the iron, coal, steel, lumber, and glass businesses as they tried to keep up with the railroads demand for materials
The spread of the railroads also led to the growth of towns, new markets, and opportunity for profiteers

7. Features of the Modern Corporation
Stocks traded publicly in Wall Street
Limited liability
Scientific Management
Vertical Integration
Horizontal Integration

8. Stocks and Limited Liability
Stocks are shares of a company held by someone and traded publicly on the stock market.
Stocks allowed the possibility to raise large amounts of money to undertake great ventures.

9. Scientific Management
Taylorism
Reorganizing business by subdividing tasks to increase efficiency. What does that mean for the worker?
The moving Assembly Line

10. VERTICAL INTEGRATION
Vertical integration is when a corporation attempts to buyout suppliers in order to control materials and transportation.
In Steel for example, a corporation might buy coal fields, iron mines, ore freighters, and rail lines.

12. HORIZONTAL INTEGRATION
Horizontal Integration; buying companies that produce similar products.
A successful attempt at achieving this leads to a monopoly.
MERGERS

13. Consolidation

14. Methods to Achieve Monopoly
Corporate Raiding and unscrupulous practices- Buyout competition to form a monopoly - complete control over industry.
Pooling arrangements – producers agree to set price
Problematic due to groups cheating
Mergers could result in a Trust
Stockholders transferred their stocks to small group of trustees in exchange for shares in the trust itself. Control was given only to very few people, the trustees
Holding Companies – A company created to exclusively buyout major producers in an industry

15. CHICAGO’S STANDARD OIL BUILDING IS ONE OF THE WORLD’S TALLEST
Example of a Monopoly
In 1870, Rockefeller Standard Oil Company owned 2% of the country’s crude oil. By 1882 – it controlled 90% through
Intimidation 1870’s
Trust 1882
Holding Company 1899
CHICAGO’S STANDARD OIL BUILDING IS ONE OF THE WORLD’S TALLEST

16. Benefits and Cost of Consolidation
The Industry can become more productive by reducing costs, creating standard product, pooling resources, avoiding replication, and sharing knowledge
Costs
reduces competition so higher prices
Placed power in the hands of very few people

17. Industrial Giants and their Legacy

18. New Industries and Inventions
The growth and consolidation of the industries changed the US economy and society
However, the unchecked power of the these large companies led to widespread abuses and then reforms.

19. Rail Roads By 1869, tracks had been laid across the continent
Methods of transformation allowed for the possibility for isolated areas across this nation to become connected with markets
k miles of track
k miles

20. ROBBER BARONS
Alarmed at the cut-throat tactics of industrialists, critics began to call them “Robber Barons”
Famous “Robber Barons” included Carnegie, Rockefeller, Vanderbilt, Stanford, and J.P. Morgan
J.P MORGAN IN PHOTO AND CARTOON

21. EDWIN DRAKE PICTURED WITH BARRELS OF OIL
BLACK GOLD
In 1859, Edwin Drake used a steam engine to drill for oil
This breakthrough started an oil boom in the Midwest and later Texas
At first the process was limited to transforming the oil into kerosene
Later, the gasoline was used for cars
EDWIN DRAKE PICTURED WITH BARRELS OF OIL

22. John Rockefeller American business Entrepreneur
He founded the Standard Oil Company that dominated the oil industry and was the first great U.S. business trust.

23. BESSEMER STEEL PROCESS
Oil was not the only valuable natural resource
Coal and iron were plentiful within the U.S.
The Bessemer process (Henry Bessemer & William Kelly) removed the carbon from iron, the result was a lighter, more flexible and rust resistant compound – Steel
BESSEMER CONVERTOR CIRCA 1880

24. Andrew Carnegie Andrew Carnegie was one of the first industrial moguls
He entered the steel industry in 1873
By 1899, the Carnegie Steel Company manufactured more steel than all the factories in Great Britain combined
ANDREW CARNEGIE

25. BROOKLYN BRIDGE SPANS 1595 FEET IN NYC
NEW USES FOR STEEL
The railroads, with thousands of miles of track, were the biggest customers for steel
Other uses emerged: barbed wire, farm equipment, bridge construction (Brooklyn Bridge- 1883),and the first skyscrapers
BROOKLYN BRIDGE SPANS 1595 FEET IN NYC

26. ELECTRICITY
1876- Thomas Alva Edison established the world’s first research lab in New Jersey
There Edison perfected the incandescent light bulb in 1880
Later he invented an entire system for producing and distributing electricity
By 1890, electricity powered numerous machines
EDISON

27. THE TYPEWRITER Christopher Sholes invented the typewriter in 1867
His invention forever affected office work and paperwork
It also opened many new jobs for women
1870: Women made up less than 5% of workforce 1910: They made up 40%

28. THE TELEPHONE
Another important invention of the late 19th century was the telephone
Alexander Graham Bell unveiled this invention in 1876
BELL AND HIS PHONE

29. Henry Flagler American industrialist and a founder of Standard Oil.
founder of what became the Florida East Coast Railway
Responsible for the development of South Florida

30. CARNEGIE’S GOSPEL OF WEALTH
The Gospel According to Andrew:
In his essay “Wealth,” published in North American Review in 1889, the industrialist Andrew Carnegie argued that individual capitalists were duty bound to play a broader cultural and social role and thus improve the world.

31. ROCKEFELLER CHAPEL – UNIVERSITY OF CHICAGO
The Gospel of Wealth
For men like Carnegie, the rich should use riches to advance society in arts, libraries, music halls.
Yet, this did not extend to direct help.
Carnegie, Rockefeller and Cornelius Vanderbilt built libraries, schools, Music halls, theaters.
ROCKEFELLER CHAPEL – UNIVERSITY OF CHICAGO

32. SOCIAL DARWINISM
Social Darwinism has its origins in Darwin’s theory of evolution
Darwin theorized that some individuals in a species flourish and pass their traits on while others do not
Social Darwinists (like Bill Sumner) believed riches was a sign of God’s favor, and being poor was a sign of inferiority and laziness
Many of the Robber Barons used this philosophy to justify their positions.
DARWIN (RIGHT) LIMITED HIS FINDINGS TO THE ANIMAL WORLD
SPENCER WAS THE ONE WHO COINED THE PHRASE “SURVIVAL OF THE FITTEST

33. INTERSTATE COMMERCE ACT
In 1887, the Federal government re-established their control over railroad activities
Congress passed the Interstate Commerce Act and established a 5-member Interstate Commerce Commission (ICC)
The ICC struggled to gain power until 1906
1887 – CONGRESS PASSED THE ICA

34. SHERMAN ANTI-TRUST ACT
In 1890, the Sherman Anti-Trust Act made it illegal to form a monopoly (Trust)
Prosecuting companies under the Act was not easy – a business would simply reorganize into single companies to avoid prosecution
Seven of eight cases brought before the Supreme Court were thrown out

35. (REAL TRUST)

36. Labor

37. WORKERS HAD POOR CONDITIONS
Workers routinely worked 6 or 7 days a week, had no vacations, no sick leave, and no compensation for injuries
Injuries were common – In 1882, an average of 675 workers were killed PER WEEK on the job

38. PROMOTIONAL POSTER FOR THE IWW
SOCIALISM AND THE IWW
The deplorable conditions led to the rise of radical groups.
Some unionists turned to a socialism – an economic and political system based on government control of business and property and an equal distribution of wealth
The International Workers of the World (IWW) or Wobblies, was one such socialist union.
PROMOTIONAL POSTER FOR THE IWW

39. Knights of Union
Membership open to all who worked, even women. Few exclusions such as Lawyers
8-hour work week, dissolution of child labor. Wanted to revamp the national economy, replacing wage system

40. INDUSTRIAL UNIONISM
Some unions were formed with workers within a specific industry
Eugene Debs attempted this Industrial Union with the railway workers.
In 1894, at its peak the Union had 150,000 members
EUGENE DEBS

41. The AF of L Craft Unions were unions of workers in skilled trades.
Samuel Gompers became president of the American Federation of Labor (AFL) in 1886.
He focused on collective bargaining to improve conditions, wages and hours…Strikes if necessary
His organization was a pragmatic group that avoided government intervention.
Against Women in the work place

42. STRIKES TURN VIOLENT
When bargaining broke down, unions would often strike, or refuse to work as a way to protest in order to gain benefits at work.
Several strikes turned deadly in the late 19th century as workers and owners clashed
Often Federal troops or private guards were called in to end the strike

43. THE HAYMARKET AFFAIR
Labor leaders pushe for change – and on May 4, ,000 people gathered at Chicago’s Haymarket Square to protest police treatment of striking workers
A bomb exploded near the police line – killing 7 cops and several workers
Radicals were rounded up and executed for the crime without a fair trial.

44. THE HOMESTEAD STRIKE
Even Andrew Carnegie could not escape a workers strike
Conditions and wages were not satisfactory in his Steel plant in Pennsylvania and workers affiliated with the AFL struck in 1892
Carnegie hired Pinkerton Detectives to reopen plant.
Detectives and strikers clashed – 3 detectives and 9 strikers died
The National guard restored order – workers returned to work without pay increase

45. PULLMAN: A FACTORY & TOWN
In 1880, George Pullman built a factory for manufacturing sleepers and other railroad cars in Illinois
The nearby town Pullman built for his employees was modeled after early industrial European towns
Pullman workers felt his puritanical town was too strict
When he lowered wages but not rent – it led to a violent strike in 1894
THE TOWN
GEORGE PULLMAN

46. THE PULLMAN STRIKE
After the Pullman Company laid off thousands of workers and cut wages, the workers went on strike in the spring of 1894
Eugene Debs (American Railroad Union) tried to settle dispute which turned violent
Pullman hired scabs and fired the strikers – Federal troops were brought in
Debs was jailed

47. EMPLOYERS FIGHT UNIONS
The more powerful the unions became, the more employers came to fear them
Employers often forbade union meetings and refused to recognize unions
Employers forced new workers to sign “Yellow Dog Contracts,” swearing that they would never join a union
Despite those efforts, the AFL had over 2 million members by 1914

48. Assessment of Labor Late 1800s
Reasons for Failures
Powerful Forces against them: Business and Government
Low membership
Immigration led to oversupply of labor
Loss of Support from middle class who saw them as radicals
Modernization of economy lessened the need for skilled labor
Few Victories
Slightly Better Pay
Compensation for injuries
Child Labor laws
8 hour work week for federal employees 1892